David Rooney/OECD Observer

Meeting budgetary targets is hard enough in any country, but for developing countries struggling to lift their economies to a higher stage of development, it can seem a near impossible task. Nevertheless, governments and local authorities everywhere in the world have a duty to provide proper public and social services for their citizens, and infrastructure that will attract investors. Tax revenues are therefore vital for meeting public demands as well as development aspirations. As a general rule of thumb, a stable and predictable budgetary framework helps foster growth and, in the longer term, reduces dependence on foreign financing, be it public or private. Taxation is a bedrock of “good government” and a driving force for wider reforms. However, devising the right framework and approach to tax is not easy, from getting the tax levels right to ensuring skills are in place to devise and implement them.

OECD

A warming planet and a flat world economy have propelled the issue of investment in clean energy to the top of the policy agenda. The question has become all the more crucial in view of the landmark global summit on climate change to be held in Paris in December 2015.

African Economic Outlook 2015/OECD

The financial landscape has changed considerably in Africa since 2000. Private external flows in the form of investment and remittances now drive growth in external finance, according to the African Economic Outlook 2015. Foreign investments are expected to reach US$73.5 billion in 2015, underpinned by increasing greenfield investment from China, India and South Africa.

Aly Song/Reuters

Investment has been hit hard by the crisis, yet is vital for a sustainable recovery and future well-being. In 2008-14 private investment ran at some 25% below pre-crisis forecasts. From infrastructure and green energy to improving education and health care, all countries depend on investment in physical and human capital.

OECD

Since democracy was restored in 1999, Nigeria has engaged in ambitious reforms towards greater market liberalisation and economic openness. By far the most populous country of the continent–with more than 170 million people Nigeria is home to 18% of Africa’s population–it now claims to be the largest
economy in Africa, with an estimated nominal GDP of US$510 billion. Its GDP growth has never been below 5% since 2003, and since 2009, it has become the preferred destination for foreign direct investment (FDI) in Africa, ahead of South Africa.

Challenging free trade orthodoxy is a heavy lift in our political culture; anything that has been in place for that long takes on an air of inevitability. But, critical as these shifts are, they are not enough to lower emissions in time. To do that, we will need to confront a logic even more entrenched than free trade—the logic of indiscriminate economic growth. This idea has understandably inspired a good deal of resistance among more liberal climate watchers, who insist that the task is merely to paint our current growth-based economic model green, so it's worth examining the numbers behind the claim. 

©Andrew Wheeler/OECD

The world economy desperately needs more productive investment: to create jobs, to increase productivity and to meet critical global goals like combating climate change. But instead of more productive investment, we are getting rising stock markets. Sadly too many policymakers and journalists don’t know the difference. Let’s start off with the basic confusion. Investment is when savings are used to pay for the creation of new productive assets–improvements in land, new buildings, machinery, computer software, the education of workers to create human capital.

©Rights reserved, Shanghai Development Research Foundation

In October 2014 China launched the Asian Infrastructure Investment Bank (AIIB), drawing wide international attention. Nearly 60 countries have joined the new international financial institution, including several OECD member and partner countries, though others have remained cautiously outside. What is the purpose of the new bank and what impact will it have? We asked Yide Qiao for his views. I guess there are several reasons for launching the new bank. 

©Korean government

Of the abundant resources given to mankind, what is the most underused resource of our time? Without a doubt, women! 

©Rights reserved

Social entrepreneurs and governments speak different languages. However, understanding each other is essential to achieve quality of life through the businesses we start, grow and scale. While sharing a goal for a healthier society, it remains a challenge for new entrepreneurs and governments to work together: first, to integrate the different ambitions, values and cultures of (social) entrepreneurs, civil servants and politicians; second, to be aligned in the acceptance, timing and implementation of societal solutions through enterprising citizens. What is the role of business in creating spaces for social entrepreneurship and a more collaborative economy?

©Bundesregierung/Bergmann

Investments are a precondition of future sustainable growth. However, investments are not just about competitiveness, but about maintaining our quality of life. As Germany currently shows, good economic numbers are a necessary, but far from sufficient, precondition of strong investment activity. On the one hand, we expect economic output to rise by an annual average of 1.8% in real terms in both 2015 and 2016. At the same time, despite a recent upward trend, public-sector investment–which often helps to pave the way for private-sector investment–is still growing relatively slowly. There is also scope for more dynamism in many key areas of private-sector investment. 

©Whitehouse.gov

In 2014, the US economy added more jobs than in any year since the 1990s. In fact, this longest streak of job growth on record has persisted into 2015. Inflation-adjusted wages are up by 1.4% annually over the last two years, more than twice the pace of the last recovery. But this is still not enough to make up for decades of subpar gains for middle-class families–a challenge shared by many other OECD economies. President Obama’s approach to what he has termed “middle-class economics” is about remedying this decades-long challenge for the future. 

Innovation has always been a foundation of our economies. From the invention of the wheel to the Industrial Revolution, via air transport, the internet and medicines, innovation leads to change, progress, and hope. In today’s world, which is still reeling from the crisis and looking for new, stronger, more inclusive and sustainable ways forward, policies for fostering innovation are more relevant than ever.

©Oxfam

According to shocking new research by Oxfam, the world’s richest 1% will, on current trends, own more than half the world’s wealth by 2016.

©Stéphane Lavoué

As the world continues to undergo a process of profound transformation, the time has come for us to rethink our traditional growth models. The challenge for both society and the business community is one and the same: can we identify new resources to foster growth that is more harmonious and more focused on the needs of human beings? As chief executive officer of Sodexo, I have every reason to believe we can. For the past 50 years our group has grown by placing people at the very core of our business model, of our organisation, and of the relationships we have with the community. 

©Sarah Turton

Years of global recession, stagnation and slow uncertain recovery prove we do not yet have the right economic model to secure the sustained, strong growth that will be vital to social and economic progress in the years ahead. 

The world is still repairing the damage done to employment prospects and social equality by the crisis. Governments are trying to create not just more jobs, but better jobs. A new OECD framework helps them to define what job quality means and to measure whether their policies are succeeding. 

In October 2014 we wrote that deflationary risks had risen in the euro area and warned of the dangers deflation poses for the economy. Where do we stand now? Has deflation been avoided or has it started to bite? 

©OECD/Michael Dean

Innovation economist Mariana Mazzucato presented her book "The Entrepreneurial State: debunking public vs. private sector myths", at the OECD on 28 May 2014. Part of The Coffees of the Secretary-General series, you can read the complete transcript of Ms Mazzucato’s presentation below. 

What if economics were within everyone’s grasp? Although you may feel that discussing Greece’s debt sustainability or Europe’s ageing problem is beyond your capabilities, Cambridge scholar Ha-Joon Chang strives to prove that you actually can.

Since 2009 the French government launched a new “auto-entrepreneurs’’ status to help small, often one-person, businesses below a certain earnings threshold to bypass many formalities of registration, in an effort to stimulate entrepreneurial activity and jobs. By mid-2014, the number of auto-entrepreneurs reached nearly 1 million, according to a French business creation agency, APCE. However, according to the national statistics office, INSEE, most of these businesses have made little if any money at all. The crisis has hardly helped, but is there a recipe for success?

Click to enlarge

If you’ve been following the income inequality debate, you’ll know there’s been much discussion on the question in the headline above. Until just a few years ago, it’s probably fair to say that mainstream opinion leaned towards the “good for growth” side of the debate. Yes, inequality might leave a bad taste in the mouth, but it was worth it if it meant a strong economy.

©Pascal Le Segretain/Getty Images

“What an amazing week. … I’m doing my best to come back down to earth and get back to work.” And so it was, in less than 140 characters that Frenchman Jean Tirole (@JeanTirole) tweeted his excitement after learning that he had won the 2014 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

©REUTERS/Kai Pfaffenbach

Let’s face it: the bulk of small and medium-sized entreprises (SMEs) are still financed mainly by bank credit. However, as bank finance is harder to come by in the current post-crisis environment, fostering non-bank financing alternatives may help closing an SME financing gap. The OECD has been looking into such issues, using input from the private sector via its financial roundtables.

©BlaBlaCar

Thanks to smart online and phone technologies, dynamic new business platforms that are altering the parametres in property, transport and other service-driven markets are fast emerging.

Companies such as Airbnb (helping you to rent or let out a room) and TaskRabbit (helping you pack boxes, walk the dog and other personal chores) have hit the headlines not just for their new business models, but their disruptive effects on established markets and services. Proponents say this “sharing” economy creates more choice and control for customers, while critics say it unfairly undermines competition.

Policymakers are now taking a closer look at how fair the sharing economy really is and to see if any rules need to be rewritten.

We asked the founder of France’s BlaBlaCar, Frederic Mazzella, how his ride-sharing company has evolved to become a prime example of the sharing economy.

.....................................

OECD Secretary-General Angel Gurría meets with Greek Prime Minister Alexis Tsipras and finance minister Yanis Varoufakis to discuss reform cooperation program.

"There is no such thing as a debt crisis: The Euro Crisis, Asia's Woes and America's Dilemma in a Global Context". This was the title of a presentation given by economist Yanis Varoufakis at the OECD in March 2013, nearly two years before he became Greece's finance minister. Part of The Coffees of the Secretary-General series, you can read the complete transcript of Mr Varoufakis's presentation below.

Click to enlarge

The GDP growth story over the past year or two has been one of diverging trends, with relative buoyancy returning to economies such as Sweden, the UK and the US, but with the euro area still looking off colour. How have the crisis and subsequent economic growth patterns affected the actual size of each country’s economy compared to 2007? Have OECD countries recovered their pre-crisis levels of GDP? 

A global recovery is in progress, but growth is uneven, while emerging markets slow down, G20 finance ministers and central bank governors said after their meeting in Istanbul 9-10 February. 

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  • Passionate about international taxation? The Institute for Austrian and International Tax Law is currently looking for a Research and Teaching Associate at the Christian Doppler Laboratory. For further information, click here.
  • In the long-run, the EU benefits from migration, says OECD Head of International Migration Division Jean-Christophe Dumont.
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  • An employee prepares breakfast in front of the Eiffel tower at the Parisian luxury hotel Le Plaza Athenee, France July 30, 2015. Nowhere in the world has more accommodation available on Airbnb than Paris. Now the home-sharing website that has transformed budget travel to the French capital is giving its super-deluxe hotels a fright too (©REUTERS/Stephane Mahe).
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  • Low interest rates here to stay for half a century, says OECD director Adrian Blundell-Wignall.
  • OECD speak on support it will offer to Greek
  • Bill Gates visited the OECD on 26 June. He met with the Secretary-General Angel Gurría to discuss areas of collaboration with his foundation and participated at a briefing session on official development assistance modernisation with OECD experts.
  • The People’s Republic of China decided to enhance longstanding collaboration with the OECD and to join the OECD Development Centre, in a historic visit by Chinese Premier Li Keqiang on 1 July to the OECD in Paris.
  • In order to face global warming, Asia needs at least $40 billion per year, derived from both the public and private sector. Read how to bridge the climate financing gap on the Asian Bank of Development's website.
  • One dollar in aid for trade generates eight dollars in extra trade for all developing countries and 20 dollars for low-income countries. Read OECD Secretary General's post on the newly released Aid for Trade at a glance 2015.
  • Catherine Mann, OECD Chief Economist, explains on Bloomberg why "too much bank lending can slow economic growth".
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Come va la vita in Italia? How's life in Italy? The OECD Better Life Index is an interactive online platform in seven languages that goes beyond GDP by offering important insights into measuring well-being and quality of life. Try it for yourself!
  • The IMF calls for a decisive energy subsidy reform in order to use the freed resources to meet critical public spending needs and to reduce pollution ahead of the Paris climate change summit.
  • Have a look at these posters representing a world without fundamental rights at work – including child labour, forced labour and inequality. Read more about this ILO image competition here.
  • Africa vs profit shifting African countries heavily rely on the income generated by multinationals’ taxation, which can represent as much as 88% of a country’s tax base. Little wonder Africa is involved in the OECD’s initiative to address tax base erosion caused by profit shifting, known as BEPS. The need to strengthen inter-governmental co-operation to curb cross-border tax losses was reaffirmed at the Africa Tax Administration Forum (ATAF) in Sandton on 21 April 2015.
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  • After three decades of extraordinary economic development, China is shifting to a slower and more sustainable growth path, according to the OECD's latest Economic Survey of China.

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